Opposition Brief — United States v. Urban Plumbing & Heating Co.

ae — — 21 i

No. 389

Office-Supreme Court, U.

FILED

AUG 2 51969

In the Supreme Court —

of the United States

OCTOBER TERM, 1969

United States of America, 5

Petitioner,

Vv.

Urban Plumbing & Heating Co.,

BRIEF IN OPPOSITION TO PETITION FOR WRIT

OF CERTIORARI TO THE UNITED STATES COURT OF CLAIMS

A WARDE H. ERWIN

3323 S. W. Harbor Drive

Portland, Oregon 97201

Attorney for Urban

Plumbing & Heating Co.

STEVENS-NESS LAW PUB. co., PORTLAND, ORE. 7-0

Page

Opinion Below 1

Jurisdiction - 1

— PIII, cents ̃ͤ]1ᷓ1lb1b1b—1—— —— 4

Reasons for Denying Writ 5

AUTHORITIES CITED

* Page

1 — By:

1 18

Products tion v. United

e th

Co. v. Jacksonville T.

27 K. Ry. Co., 148 U.S. 372 4

Arnold v. United States, 263 U.S. 427

Automatic Radio Mfg. Co. v. Hazeltine Re.

search, 176 F.2d 76/55 13, 22

Bennett v. Mahon, 180 F.2d 222 12, 15

Freund v. United States, 260 U.S. 60 20

Gill v. S. H. B. Corporation, 34 N. W. 2d 526 12, 17

Hartzville Mills v. United States, 271 U.S. 48

9, 10, 11, 12, 21

Hazelhurst Oil Mill and Fertilizer Co. United

Heike v. Unive Staten, 2i ae Re

Heike Lien ates, S17 U.S. 638 - — 4

v. Louis Dreyfus g

ee F.2d 753 21

wer Nex oo v. W. M. Smith Electric

350 S.W.2d

Marconi Wireless — Co. of America

v. United States, . 4

Portland Hotel Corp. v. Fideli Storage Co

134 F.2d 67 ad —— 14

8

142 A. 2d PAPE a. 5

Union Pacific R. Co. v. —— —

4 . 20

AUTHORITIES CITED (Cont.)

United States v. n t

ame cr,

V. race &

384 U.S. 424 681% 1 23,3

8. 289

United States v. ( Ine, 344 U.S. 149 23

United States v. Carlo ianchi & Co., 373 U.S.

Ln 11,28, 29, 34

United States v. — is: »

United States v. Utah Construction Co., 384

„ 28, 29, 31, 34

United Steel Workers of America v. ge

Wheel and Car Corp., 363 U.S. 598 10

Val-Rich v. Tol Electric Co. 196

So. 2d 8 12, 17

vines v. General Outdoor Advertising Co., 171

F. 2d 487 — 12. 15

— — , 289 F. 2d 389 12, 14

Woodcrest Construction v. United States,

408 F.2d 406 34

W. R. Grimshaw Co. v. Nevil C. Withrow Co.

248 F.2d 896 12, 15, 23, 32

W.R.B. Corp. v. United States, 183 Ct. Cl. 409. 18

Statutes

— am Te 81, 41 U.S.C.

18, 25, 26, 32, 34

Texts

79 American Law Reports 655 186, 24

5 Williston, Contracts (rev. ed. 1937) 13

P!

1 160 13, 16

No.

In the Supreme Court

of the Anited States

OcToser TERM, 1969

United States of America,

v.

Urban Plumbing & Heating Co.,

BRIEF IN OPPOSITION TO PETITION FOR WRIT

OF CERTIORARI TO THE UNITED STATES COURT OF CLAIMS

Petitioner,

The respondent Urban Plumbing & Heating files

its brief in opposition to the petition for Certiorari.

OPINION BELOW

The opinion of the Court of Claims is reproduced

in the appendix to petitioner’s brief and will not be

reprinted.

JURISDICTION

The respondent disagrees with the statement of

petitioner that this Court has certiorari jurisdiction

[28 U.S.C. 1255(1)].

Section 28 U.S.C. 1255 (1) provides

that this court may review opinions of the Court of

Claims by certiorari.

Petitioner claims that the Court of Claims’ deci-

sion is final (Pet. Br.) although admitting it is inter.

locutory at the same time (Pet. Br. 1, n. 1).

The petitioner’s contention is that the remand by

the Court of Claims to the Armed Services Board of

Contract Appeals for a determination of the matter

of damages is to be disregarded for the purpose of

finality.

Respondent disagrees. The Court of Claims has

retained complete jurisdiction of the case, and the

Board has merely been directed to make a further

finding. The element of damages may well be a very

important matter to be ultimately disposed of, and

if certiorari should be ultimately granted in this case,

the damage element may well be a ground upon which

respondent may itself seek certiorari if the Armed

Services Board of Contract Appeals fails to make a

proper finding, or if the Court of Claims should fail

to enter a proper award.

In support of petitioner’s claim for certiorari ju-

risdiction, petitioner cites three cases:

United States v. Caltex, Inc., 344 U.S. 149.

United States v. Central Eureka Mining Co,

357 U.S. 155.

United States v. Acme Process Equipment Co.,

385 U.S. 138.

Each of those cases has been examined, and none

appears to have any relevance to the point for which

they are cited:

Caltex was a case where the army destroyed an

oil refinery in the Philippine Island to keep it from

falling into enemy hands. A direct action for compen-

sation was brought in the Court of Claims, and this

Court granted certiorari to consider the question of

whether compensation was due under the constitu-

tion as a “taking of property.”

Central Eureka was a case brought directly in

the Court of Claims under a special statutory au-

thority to review orders of the War Production Board

irrespective of lapse of time, laches, or a period of

limitation. The board had authorized closure of a

gold-mining operation without taking the property or

its equipment. This court granted certiorari because

the Court of Claims placed a construction upon the

statutory review authority to the effect that the

legislaion was intended as a mandate to allow com-

pensation. The Court of Claims’ decision appeared to

be final.

Acme Process was an original proceeding in the

Court of Claims for damages for cancellation of a gov-

ernment contract. The defense was that the cancella-

tion was motivated by a violation of the “antikick-

back” statute, and this court granted certiorari to re-

view a Court of Claims’ decision that the kickback

statute did not authorize cancellation for such a viola-

tion under the facts of that case. The Court of Claims’

4

decision was final. The application of the three cases

to the point for which they are cited is not appareni

from reading of the reported decisions.

The decisions following appear to support a con.

trary conclusion:

Marconi Wireless Telegraph Co. of America v.

United States, 320 U.S. 1.

American Construction Co. v. Jacksonville 7.

& K. Ry. Co., 148 U.S. 372.

United States v. Beatty, 232 U.S. 463.

Heike v. United States, 217 U.S. 423.

Arnold v. United States, 263 U.S. 427.

CORRECTED STATEMENT

The statement of the case while correct in many

details is incomplete or might be misleading.

The statement (Pet. Br. 3) that the completion

date was important “because the contract work in-

volved shutting down a portion of the base-heating

plant which could not be done during the Alaskan

winter” is misleading in that the contractor was not

made aware of the fact that a portion of the plant

could not be shut down during the winter; only the

government knew of that fact.

For the first time, at the hearing before the

Board did it first become known to the contractor

that the base engineer refused to permit a shutdown

of any portion of the plant. His decision, it was then

discovered, was based upon a desire to have standby

power and heat (Tr. 112) during the severe Alaskan

winter.

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oo

5

It is stated that the contract did provide that no

ume extension would be allowed for submission of

material and equipment which did not fulfill the re-

quirements (Pet. Br. 4). The statement is true, but

that matter was not an issue in this case because

while the respective manufacturers guaranteed that

their respective products would “fulfill the require-

ments” (a fact stipulated to by one of the airforce

attorneys immediately prior to the hearing after an

appraisal of the situation by the government’s own

independently selected-engineer (Ex. 49 Portland) )

equally as well or better than the named brand, the

Board, the Court of Claims, and the contracting offi-

cer himself, each found that the delay was related to

the failure to have someone available to approve or

reject the products submitted (Pet. Br. App. 30 and

63), and was not related to a “failure of fulfillment

of the requirements.”

It is stated (Pet. Br. 4) that the architect-engi-

neer advised orally that he would reject the coal

seales and combustion air coils, if appointed.

This was, of course, not essential to the deter-

mination requested by the petition, but it might be

misconstrued. The acual situation was that the gov-

ernment would not or did not make a determination

whether or not the procurement office (to whom all

submittals were made) would retain the function of

“approval or rejection” of products submitted or

would employ a third person (Tr. 450), and it was

38 days before they finally made that determination

(Ex. A, Portland, Tr. 474).

1

It is true that the contractor promptly cancelled

its orders with the proferred equipment manufactur.

ers upon learning of the intended rejection if the per.

son making the remark was appointed as approval

engineer (incidentally, the engineer denied making

any such (Tr. 477-9) remark). However, it is like.

wise apparent that the contractor could not place or.

ders with any manufacturer “named or otherwise”

until it had received the approval of the procurement

office, and the government procurement officer 80

testified (Tr. 195).

He stated:

“Normally, a contractor is taking a great risk

to place orders and start production on supplies

that have not been approved by the government

since they may be upset, and that is part of gov-

ernment’s claim.”

As to the ash handling equipment rejection (Pet.

Br. 5), the Board found that there was no reasonable

excuse for failure to disapprove of the ash handling

equipment until August 29 (Pet. Br. App. 63). No

appeal was taken from that finding nor objection to

it made by the government in the Court of Claims.

Reference to the 69 days (Pet. Br. 5) as being

generous to the contractor is not an accurate state-

ment of fact. As one example, it was admitted that

69 days arithmetical extension in a mid-Alaska winter

is not equal to 69 days in midsummer (production

schedule changes and many other factors were in-

volved).

7

The board itself held that the extension of 69 days

was inadequate and that cancellation would have been

unthinkable. The government took no appeal from

those findings nor ever made an objection thereto

(Pet. Br. App. 32, 33).

The petitioner’s statement (p. 7) states that the

board's determination was based upon the ground

that plaintiff’s claim was barred by the supplemental

agreement. The cited reference is a general reference

to the board’s opinion (Pet. Br. 7 and 45). The rea-

son for the general citation to the entire opinion

rather than to a particular part is that the board’s

opinion did not so state, although an inference of such

a determination may be made.

There are other discrepancies, but it is felt that

none is important enough to affect this court’s deter-

mination of the petition for certiorari.

A simple summary of the case is: (1) that there

was a short-term completion contract for modifica-

tion of a heating plant in Alaska; (2) that in con-

formity with the contract, the contractor offered

drawings for certain products for approval or dis-

approval; (3) the government did not, could not, or

would not, determine whether or not to appoint an in-

dependent approval engineer; (4) that after 38 days’

delay, it finally appointed such an engineer who ac-

cording to both the Armed Services Board of Contract

Appeals, and the Court of Claims unduly delayed in

disapproval of some of the items submitted; (5) the

contracting officer knew that an extension would be

8

necessary and learned privately that the base engi.

neer would not permit completion in sequence he.

cause of the onset of the Alaskan winter and the ne.

cessity to maintain standby equipment; (6) it was

privately determined within the government to force

acceptance of an extension by an offering of an in.

adequate extension or in the alternative to demand the

contractor perform over a total period of one year

(365 days) under threat of cancellation.

The court found that under the special facts of

this case, that this constituted duress and remanded

the case to the board for a determination of damages,

REASONS FOR DENYING THE WRIT

Basically, the government’s argument is that the

Court of Claims has extended the legal concept of

duress and has thereby restricted the government's

power in contract negotiation matters where a nego-

tiator has asserted an unfounded contract right (Pet.

Br. 9), accompanied by a threat of cancellation.

Simplified, the government contends that the rule

should be that to avoid a charge of duress, all is re-

quired is that the contracting officer contends, “Well,

I thought I was right when I threatened the con-

tractor.”

To bring this within a recognizable ground of cer-

tiorari, the petitioner claims that the decision is in

conflict with Hartsville Mills v. United States, 271

U.S. 43.

RI Coen TI POOR COPY

The argument relating to the government’s bar-

gaining power is incorrect, and further, it is not a

ground for certiorari.

The Court of Claims’ opinion in Urban made a

complete and thorough analysis of the federal law of

duress, and petitioner itself states that Hartsville

Mills is probably not the law today (Pet. Br. 13).

That concession would be sufficient to deny the peti-

tion but Hartsville Mills is not authority for the prop-

osition for which it is stated.

The best analysis of that case can be made by ref-

erence to the later case of Hazelhurst Oil Mill and

Fertilizer Co. v. United States, 42 F.2d 331 (1930)

wherein it was stated (p. 338) as follows:

“It is urged on behalf of defendant that the

8 is precluded from any 8 by the

guage used in the opinion of the Supreme

Court in Hartsville Oil Mills v. United States, 271

U.S. 48, the plaintiff therein being a corporation

which was in the same position as this plaintiff

but the language of the Supreme Court on which

the defendant relies we think was intended to

apply only to the evidence in that case, which was

far from being complete with reference to plain-

tiff’s inquiry and the nature thereof.”

The court in Hazelhurst Oil then quotes directly

and far more extensively than does petitioner on page

13 of the brief from the Hartsville case pointing out

that the language was intended to refer only to the

failure to prove damages.

A reference to the citator and to Williston indi-

3

pare ot 2

10 1

Ne

cates that the Court of Claims has not failed to fol.

low Hartsville. In fact, dozens of claims were later

allowed by the Court of Claims without any objection

by the government.

Petitioner calls attention in the brief to the foot.

note in Anthony Grace; it is contrary to the conten.

tion of petitioner. (United States v. Anthony Grace

& Sons, Inc., 384 U.S. 424).

It states that:

“findings and conclusions of the Board of Con-

tract Appeals do not have the same finality on

review.”

The comparison was to the finality of a decision

of the labor arbitrator in United Steelworkers of

America v. Enterprise Wheel and Car Corp., 363 U.S,

593, as compared with finality of decisions of the

Board of Contract Appeals.

The decision in Anthony Grace related to a case

where the successful bidder on a governinent con-

tract proposal did not execute the final contract with-

in the time specified by the bid, and the contract was

terminated as provided in the offer. An appeal to

the Board of Contract Appeals was dismissed as be-

ing untimely on appeal; the Court of Claims assigned

the case to one of its commissioners as a fact finder

instead of remanding to the Board.

The court granted certiorari and held that the ad-

ministrative record must be made in the Board of

Contract Appeals and not in the Court of Claims.

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ll

As to the conchisiveness of the record, the court

merely held that the Court of Claims is restricted to

the RECORD made in the Board and can not take

original evidence. :

The court referred to its decision in United States

v. Carlo Bianchi & Co., 373 U.S. 709, and approved

(p. 428) two procedures when the board has not con-

sidered an incidental matter. One, where the record

was complete enough to grant judgment for the con-

tractor, it could do so; and two, where the court did

not believe the administrative record permitted it to

enter a judgment for the contractor, it could stay its

own proceedings and remand to the agency for fur-

ther action.

The latter course is exactly what the Court of

Claims has done in this case. It has retained juris-

diction, and it has directed the Board of Contract Ap-

peals to make an equitable determination of the mat-

ter under the terms of the contract.

Further, the court in Anthony Grace went so far

as to state that if the board demonstrated an unwill-

ingness or incapacity to act, a contractor may con-

clude that those procedures have become “unavail-

able,” and he may proceed directly in the Court of

Claims.

The following cases and texts in addition to Harts-

ville Mills previously discussed are cited by petitioner

relative to the question of duress.

a) United States v. Bethlehem Steel, 315 U.S. 289 as

to a threat to breach a contract.

12

b) Portland Hotel Corp. v. Fidelity Storage Corp,

184 F.2d 57.

e) 5 Williston, Contracts § 1606.

d) Footnote citations (p. 13) as follows:

Williamson v. Bendiæ Corp., 289 F.2d 389, 392.

3 (C. A. 7).

W. R. Grimshaw Co. v. Nevil C. Withrow Co.,

248 F. 2d 896, 903-905 (C. A. 8).

Bennett v. Mahon, 180 F. 2d 224, 231 (C. A. 8)

(certiorari denied).

Vines v. General Outdoor Advertising Co., 171

F. 2d 487 (C. A. 2).

Tri State Roofing Co. of Uniontown v. Simon,

142 A.2d 333.

Gill v. S.H.B. Corporation, 34 N.W.2d 526.

Val-Rich Corporation v. Tole Electric Co., 196

So. 2d 486.

It is contended (Pet. Br. 13) that a threat must

be made in bad faith to constitute duress and fur-

ther, that the other party was not in a position to

have obtained an adequate remedy by suing for dam-

ages if the threat were carried out, and the following

are cited:

King Construction Co. v. W.M. Smith Electric

Co., 350 S.W.2d 940.

Ross Systems v. Linden Dari-Delite, Inc., 178

A.2d 258.

It is contended (Pet. Br. 13) that where contract

amendments have been voided for duress, both bad

faith and lack of adequate legal remedy was clear,

and the following are cited:

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18

Aircraft Associates v. United States, 357 F.2d

373.

W.R.B. Corp. v. United States, 188 Ct. Cl. 409,

468-9.

Shewan & Sons v. United States, 73 Ct. CL

49, 79-95.

Cf, Alloy Products Corporation v. United

als Lines’ n r Dreyfus C

e ines, v. ig Us *

372 F. 2d 753, 756, 758. sg

5 Williston, Contracts 4529-4533, § 1620.

5 Williston, Contracts 4501-4502, § 1606.

Automatic Radio Mfg. Co. v. Hazeltine Re-

search, 176 F.2d 799, 804-805.

and they are cited for the proposition that none of

the authorities suggests that a threat to cancel a con-

tract not subject to cancellation is duress per se.

Bethlehem Steel is an interesting case. It held:

“Here, it is suggested that feebleness is on

the side of the Federal Government of the United

States, overpowering strength on the side of a sin-

gle private corporation. Although there are many

eases in which an individual has claimed to be a

victim of duress in dealings with the government

e.g. Union Pacific R. Co. v. Public Service Comm.,

248 U.S. 87, this, so far as we know is the first

instance in which government has claimed to be

a victim of duress in dealings with an individual.”

The case pointed out no duress was present since

the government could have commandered the plant

cr compelled the corporation to produce at a price set

by the government.

14

The case has absolutely no factual or legal com-

parison to the Urban case.

Portland Hotel was a case where a landlord threat.

ened eviction unless a tenant consented to an in-

creased rental which was then consented to. Under a

claim that the increase was secured by duress, the

court held the threat was insufficient to constitute

duress.

The case does not appear applicable.

5 Williston, Contracts, has previously been cited,

and petitioner’s brief admits that modern law has

abandoned the older rules of duress.

The footnote citations for the proposition that a

threat must be made in bad faith and without an ade-

quate remedy are contrary to the petitioner’s cita-

tion to Williston but are commented upon as follows:

Williamson was a case where an individual

claimed the Bendix corporation refused to employ him

permanently under a contract for permanent em-

ployment. The company defended on the ground of a

release which the proposed employer claimed was se-

cured by duress, coercion and under undue influence.

The parties treated the entire claim as duress

which under Indiana Law was defined as a threat of

bodily restraint to compel execution of an agreement.

Plaintiff was a lawyer and clearly understood the

release, its import, and effect upon him.

The case would appear to be obviously inapplicable

to the present matter.

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15

Grimshaw was a case where a subcontractor

claimed that he was not required to finish stools and

sills as shown on the contractor’s plans.

The court held that where the facts which are al-

leged to constitute duress are not in dispute, the ques-

tion is one of law. The court held that the fact that

the contractor had advised the subcontractor that if

it did not perform, it would perform the contract it-

self or by others was not duress under the facts of

the case.

While there is some language to support the prop-

osition for which it is stated, the final conclusion is:

On consideration of the whole record, no facts

were present sufficient to support a finding of duress.

Bennett was a case where one party brought ac-

tion to compel specific performance of an agreement

for a partnership relating to the garbage collection

of Kansas City, Kansas. The court held the agree-

ment entered into was not entered into by duress; the

court holding that the mere refusal to carry out a con-

tract does not in and of itself constitute duress.

The case would not appear to be factually appli-

cable.

Vines was a case involving a claim for quantum

meruit services as a salesman of outdoor advertising.

The evidence showed that the company advised that

it would not enter into a new contract unless cer-

tain amounts claimed under a previous contract were

waived.

16

The court stated:

“The law of duress has been much extende4-

it is inconsistent with the modern theory of dur

ess to assert as an infallible rule that threatened

repudiation of contractual obligation can not

amount to duress (citing Williston, § 1620).”

The court did state that the mere threat to repudi-

ate a debt unless the obligee will enter into a contract

will not without more avoid it.

The case would appear to have no factual appli-

cation.

Tri State Roofing was a case involving a claim of

a “subcontractor” to recover under a roofing contract

opposed by claim for delay by the general contractor

which was met by a claim for a release from liability

for delay and a claim that the release was secured by

duress in that the subcontractor threatened not to

perform the contract unless the release was signed.

The court stated:

“To constitute duress or business compulsion,

there must be more than a mere threat which

might possibly result in injury at some future

time, such as a threat of injury to credit in the

indefinite future. It must be such a threat that

in conjunction with other circumstances and busi-

ness necessity, the party so coerced fears a loss

of business unless he does so enter into the con-

tract as demanded (Reference as to 79 ALR 655-

669).”

The case does not appear to be authority for the

proposition stated either factually or legally.

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17

Gill was a case where an owner refused to pay his

obligation to a contractor unless the contractor exe-

cuted a release of all claims.

The court stated that this alone would not consti-

tute duress but analyzed other cases in which that

fact coupled with the same financial distress and

other facts would constitute duress.

The case if applicable probably holds contrary to

the proposition for which it is cited.

Val-Rich was an equity suit for foreclosure of a

mechanic’s lien in which a defense of duress was al-

leged claiming that a mechanic caused delay and the

lien itself constituted duress.

The court held that this alone when there was a

full legal remedy would not constitute duress unless

something further were pleaded and the defense was

stricken.

The case is likewise not factually or legally appli-

cable.

King Construction was a case where an oral con-

tract for the purchase of a crane was held invalid

where the seller proposed to furnish a crane it knew

would not meet specification of purchaser’s contract

with the Atomic Energy Commission, and thereby

forced purchaser to get a crane for nearly double the

contract amount when purchaser could not secure the

erane from any other manufacturer, and no agree-

ment was made to rescind the oral contract.

The case is cited for the proposition that bad faith

was found. The case does not so state. The lower court

held there was no duress; the appellate court found

to the contrary. The lower court’s decision was bo

the effect that the purchaser executed the second con.

tract out of “fear of economic loss” only which did not

constitute duress. 5

The appellate court merely stated that the seller

took “undue advantage of the purchaser.”

The appellate court held that “fear of economic

loss” did constitute duress (p. 942).

Ross-Systems was a case involving a claim for

overcharges for a franchised ice cream mix.

The court said that duress exists when payments

are made under duress or “business compulsion”

where induced by the wrongful pressure of the payee,

and the payor has no immediate and adequate rem

in the courts to resist them.

The lower court had held that the franchisee

could have refused payment and defended himself in

court.

The appellate court held that adequacy of legal

remedy is not a narrow term and embodies the exig-

encies of the situation in which the victim finds him-

self. |

Aircraft Associates held that a decision of Armed

Services Board of Contract Appeals was a decision

upon a question of law and was not entitled to final-

ity under the Wunderlich Act.

The facts are that certain airplane parts on planes :

9 5

ag

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19

gold by the government had been removed. The con-

tracting officer demanded a release of a claim for the

parts as a condition to payment of other obligations

and extension for payment of obligations to the gov-

ernment.

The ASBCA held there was no duress. The Court

of Claims disagreed, pointing out that the officer

knew of the removal of parts and that the extraction

of a promise based upon the fault of the promisee con-

stituted duress.

The case is admittedly authority for Urban’s po-

sition, and factually, is almost identical with the case

now petitioned; yet, petitioner attempts to cite it for

a contrary proposition.

Shewan was exactly contrary to the statement of

counsel as to the proposition for which it was cited.

The case involved the government holding payment

clearly due until the contractor would agree to a com-

plete release of unrelated matters.

The court held the government can not take ad-

vantage of its own default to exact a release of sub-

stantial claims. Further, that the court held that the

conduct of defendant exended beyond the breach of

contract remediable at law and constituted duress.

(It should be remembered that here in Urban

the contracting officer withheld payment from

Urban which was later ordered paid by Air Force

- Attorneys who could find no excuse for withhold-

ing it since the amount withheld was admittedly

due to the contractor. The contractor could not

— cisdacicecsSecbanl

20.

release his bond until the claim was paid, and

although the withholding was not connected with

the execution of the supplemental agreement, it

illustrates the propensities of the contracting

officer.)

The case of Freund v. United States, 260 U.S. 60,

67, 70 is cited. In Freund a threat to cancel a con.

tract was held by the Supreme Court to constitute

duress, and the Court of Claims was reversed with

a substantial award allowed.

The court also cited Union Pacific Railroad (Co. v.

Public Service Commissioner of Missouri, 248 U.S. 67,

79, where the court pointed out that the government

and the contractor are not on equal terms, and the

fact that it might indulge in vexatious litigation does

not prevent a claim for duress.

There is nothing “per se” about a holding that the

factual situation in Urban Plumbing constituted dur-

ess when the Supreme Court supports the opposite

view from that suggested as a reason for granting

certiorari.

Alloy Products (Alloy Products v. United States,

302 F.2d 528, 530) is cited as a case for compulsion,

and comparison is suggested.

No comparison seems possible. The Court of

Claims was asked to set aside a renegotiation agree-

ment entered into between the plaintiff and the gov-

ernment after studies by competent lawyers for both

parties.

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21

The court found that there was no evidence that

the plaintiff had been unlawfully constrained or com-

pelled by another to perform under circumstances

which prevented the exercise of a free will.

The case is not factually or legally comparable.

Hellenic Lines is cited under an admission (Pet.

Br. 14) that the modern tendency is to regard any

transaction as voidable which the party seeking to

avoid was not bound to enter into, and which was

coerced by fear of a wrongful act by the other party

to the transaction.

We agree that it is an excellent authority.

In the Hellenic case, the court made a complete

and exhaustive study of the law including the Harts-

ville Mill case.

The eourt pointed out (p. 757):

% it is obvious that there is no line of ab-

solute demarcation between fear that deprives a

person of free will and judgment and lesser de-

grees of fear .. moreover the nature and extent

of the pressure is inseparable from the subject.

The pressure must be improper and excessive in

going beyond what is reasonable under the cir-

cumstances in order to constitute either duress

or undue influence.”

The court further pointed out:

“A key element today is the state of mind of

the person threatened. This is not to say that the

existence of choice necessarily disposes the exist-

ence of duress.”

22

The court went on to quote Mr. Justice Holmes

that choosing the lesser of two evils is a “character.

istic of duress.”

Automatic Radio was a case involving a mere

threat to resort to civil litigation which the court

held was insufficient in and of itself to constitute

duress under the facts of that case referring to a

patent licensing agreement.

The case adds nothing to the petitioner’s claim

for certiorari.

Where the Court of Claims under an undisputed

factual situation has merely determined that the con-

tracting officer should have used, the contract clause

referring to unforeseeable delays instead of a threat

of cancellation unless his demands are met, the court

has acted fully within its powers. (United States v.

Utah Construction Co., 384 U.S. 394, (416-417).

The foregoing thirteen cases cited in footnote 14

of petitioner's brief (p. 13) are a very small fraction

of the state and federal cases in which the matter of

duress is discussed.

They were apparently selected because they are

opinions in which the various courts in some of the

cases referred to the BAD FAITH of the “duressor.”

The conclusion which petitioner desires to force

upon this court is that this court should adopt a rule

for all federal courts that if the “duressor” knows

that he is acting in bad faith in the threatening con-

tract termination, then this act may constitute dur-

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ees, but if he testifies that he thought he was correct

in threatening contract termination, it would not con-

situte duress.

It is obvious that this is not the function of cer-

tiorari, and of course, could never be the law. Duress

is universally held to depend on the factual situations

of each case and depends in some cases on such var-

iables as the personality of the individual “duressed.”

However, the Court of Claims in Urban did not

lay down a “per se” rule of duress as claimed. In

this case, the undisputed evidence was that the con-

tracting officer knew that the government had de-

layed the contractor, refused to consider factually a

reasonable time which that delay caused the contrac-

tor, and offered a time extension which was deter-

mined by the Board of Contract Appeals to be obvi-

ously inadequate knowing that even if the contractor

should accept it that the government itself could not

because he had been secretly notified by the base engi-

neer that he would not permit a shutdown of any

heating equipment during the Alaska winter in order

to make the changeover (Pet. Br. App. 32-83). In

order to force the contractor to accept the 245-day

extension, he threatened cancellation, a situation

which the Board of Contract Appeals found to be

unthinkable in the heart of the most severe winter

ever recorded in Alaska, a finding which was accepted

by the Court of Claims and not opposed by the gov-

ernment in the Court of Claims or elsewhere.

It was a matter of law. (W. R. Grimshaw v. Nevil

C. Withrow Co., 248 F.2d 896 (C.A. 8).

24

An examination of supplemental decisions to the

annotation in 79 A.L.R. 655 regarding “business com.

pulsion” discloses that there are 78 cases cited in ad-

dition to those cited in the annotation. Those 78 Cases

are from 24 jurisdictions. Petitioner cites only 18

cases relating to all types of duress from five juris.

dictions while two additional jurisdictions cited ad

mittedly were contrary to petitioner’s claim.

It might be interesting in passing to note that in

a dissenting opinion in United States v. Central Fu-

reka Mining Co., 357 U.S. 155, in 1958, Justice Harlan

stated in respect to the tenacity of the Court of

Claims:

“The Court of claims certainly not given to

the easy allowance of demands upon the public

treasury faced up to what the Constitution plain.

ly requires in this instance.”

When the petitioner claims (Pet. Br. 14) that the

Court of Claims had adopted a “per se” rule relating

to duress, it is grossly unfair and totally in error. A

reading of the Court of Claims’ opinion will totally

dispell any such contention.

Reading the petitioner’s claims objectively, it is

believed that petitioner wishes this court to put its

stamp of approval on the conduct of the contracting

officer in threatening termination for events for

which the government bore the sole responsibility.

A holding to the contrary is no jeopardy to the

government’s negotiating position as this case bears

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25

witness. The contractor has sustained government-

audited out-of-pocket direct (no overhead, profit, etc.)

expenses of $80,000 due to it since 1962 (interest

alone at 6% is 42%). It has had the additional priv-

lege of paying for litigation cost and travel expense

from Fairbanks, Alaska, to Dayton, Ohio, to San

Francisco, California, to Portland, Oregon, to Wash-

ington, D. C., in addition to helping finance the gov-

ernment’s defense of this case in opposition.

In quoting statistics, one can not help but inquire

how many well-founded claims have been denied

merely on account of the citizen’s inability to finance

the steps in litigation through which the government

at taxpayer’s expense may take an opposing litigant.

The contract officer needs no further weapons in his

arsenal to deal with recalcitrant contractors.

The “government” (all of us) had the benefit of

the contractor’s work, labor, skill, and money, and it

surely should compensate it fairly, and the first

ground for certiorari would appear to be untenable.

The Wunderlich Act permits the Court of Claims

to find exactly as it did, and no ground for certiorari

would appear to exist unless the court wishes to gen-

erally exercise its discretion (Part V, Rule 19, Rules

of the Supreme Court).

The other ground stated in support of the peti-

tion (Pet. Br. 15) is that the Board rejected the find-

ing of the Board, and “in effect” entered its own find-

ings contrary to the mandate of the Wunderlich Act,

41 U.S.C. 321 which confines the Court of Claims’

review of facts to a determination of whether or not

there was “substantial evidence” to support a fact

found by a contract board.

Because of what would appear to be a mistaken

belief as to what the Board of Contract Appeals ae.

tually found, the petitioner arrives at a completely

erroneous conclusion.

Petitioner assumed that the Court of Claims re-

examined the factual matter of whether or not a con-

tractor in submitting for approval or rejection a prod-

uct which did not conform in exact particulars to 4

“named brand” contributed to the delay in perform-

ance of a contract by offering such a submittal (Pet,

Br. 17).

It was admitted, however, that the claimed re.

examination of factual matter was “in effect” accom-

plished by ignoring “substantial evidence.” (Pet. Br.

17).

That belief is mistaken because the submission of

a product for approval or rejection was exactly what

the contractor had a duty to do under the contract

even as to brand-name products called for by the speo-

ifications. The interpretation of contractual provi-

sions are legal matters on which a Board’s decision

is not final under the Wunderlich Act.

There was simply never an issue about that mat-

ter, and of course, the court ignored it.

Both the Board and the court found that the fail-

ure to appoint an approval engineer and an extended

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27

period in rejection after such an appointment was

finally made were the causes of delay. There was no

dispute in evidence, and there was and is now no dis-

pute as to the determination of that fact.

The matter upon which counsel mistakenly relies

is whether or not the products submitted were or

were net in conformity to the “or equal” clauses of

the specification, a point which was completely un-

necessary to the Board or the court’s determination of

the case, and concerning which there was not any

issue.

The other matter to which petitioner refers was

not an issue either before the board or before the

court (Pet. Br. 19). That reference related to the

Board’s statement relating to the coal thaw shed

which was a portion of the contract completely un-

related to the matter of delay relating to “approval or

rejection” of drawings.

No evidence (except incidental) was ever directed

toward delay in the coal thaw shed. The government

had never at any time prior to the hearing made a

contention about any such delay or its relation to the

total performance of the contract. A prehearing or-

der was entered into between the parties defining

the issues. Delay in the completion of that portion of

the work was not in issue ever. The prehearing order

was printed as Exhibit A to plaintiff’s motion for

summary judgment in the Court of Claims (Tr. 28

and 31-2).

Neither the question of delay resulting from sub-

mittals was made an issue nor was any question of

delay in completing the coal thaw shed. The referencs

by the Board of Contract Appeals to the fact that it

could only find three days’ delay in the coal thay

shed work caused by the government was a mere

gratuity. No evidence was ever directed toward that

point since it wasn’t an issue.

As siated in the brief before the Court of

if it had been an issue, the evidence would have shown

that the work in the coal thaw shed was completed

at the time of the extension and that no one made

any reference at any time to any delay (Ct. Cl. Br

68-9).

Citations as to the second point (Court of Claims’

review of decisions of a board) admit that the Wun-

derlich Act was intended to liberalize the review of

decisions of such boards in the same manner as could

any other reviewing court (Tr. 16).

But, complains petitioner, the Court of Claims is

going beyond its authority.

In support of this contention, it cites United

States v. Carlo Bianchi & Co., 373 U.S. 709, United

States v. Utah Construction and Mining Co., 384 U.S.

394, and United States v. Anthony Grace & Sons,

Inc., 384 U.S. 424.

Bianchi and Anthony Grace have previously been

discussed, and are not applicable since nothing this

court has done in the Urban Plumbing decisions con-

flicts with those decisions. The Court of Claims has

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not created a new record by its own commissioner as

was attempted on Anthony Grace, but on the contrary

has exactly conformed to the suggested dispositions

outlined in the Grace and Bianchi decisions.

The Court of Claims certified the administrative

record in this case (Urban Plumbing) to one of its

commissioners who found the record did not contain

any factual question to review, and returned it to the

Court of Claims for purely legal determination.

Utah Construction (1966) was a case in which

the contractor was to build a facility for the Atomic

Energy Commission. The contract provided that fact-

ual disputes should be determined by the contracting

officer subject to appeal to the head of the depart-

ment whose decision was to be final and conclusive.

After completion, the contractor filed claims for

additional compensation and time extensions pursu-

ant to the “changed conditions” clause of the con-

tract.

The Board of Contract Appeals:

1. Denied the request for time extension and

damages for the “pier drilling” claims on the

ground that the increased costs were incurred by

the subcontractor rather than the contractor and

that the delay was caused by a dispute over gov-

ernment-supplied concrete aggregate which was

a matter not before the board.

2. Denied compensation for but allowed addi-

tional time for the “shield window” claim.

80:

8. Ruled that the appeal from the contrae

tor’s rejection of the claim for additional com.

pensation for poor quality aggregate was un-

timely and remarked that if the claim was based

upon unliquidated damages for breach of war.

ranty or delay, it (the board) had no jurisdiction

to grant monetary relief.

Respondent filed a direct action in the Court of

Claims for breach of contract asserting government.

caused unreasonable delay.

The Court of Claims held that the “pier drilling”

and “shield window” claims were primarily for breach

of contract and ordered a trial de novo on the factual

issues in those claims.

It held that since the concrete aggregate claim

was for “breach of contract” rather than “arising un-

der” the contract, the factual issue should be resolved

in a judicial trial.

The Supreme Court granted certiorari and af.

firmed the court on the proposition that liability for

breach of contract claims do not lie within the juris-

diction of the Board of Contract Appeals and further

held that contractors do not need to process breach

of contract matters through the Board of Contract

Appeals before filing suit in the Court of Claims.

The court found that the claim of poor quality

aggregate was a claim for breach of contract and af-

firmed the Court of Claims.

As to the “pier drilling” and “shield window’

BLEED THROUGH POOR COPY

81

dsims, the court agreed that the board lacked au-

thority to consider “delay damages” for those claims.

‘However, the court held that the board did have

authority to consider time extensions under specific

contract provisions, and if those requests called for

“fact finding” such facts would be (if properly sup-

ported) conclusive on the parties, not only under the

contract provisions but also under the court action

for breach of contract and delay damages.

The court then discussed the doctrine of “collat-

eral estoppel” and the needless duplication of “evi-

dentiary hearings.” (p. 420 et seq.).

It is thus apparent that Utah Construction was

concerned with the distinction between breach of con-

tract cases not within the board’s jurisdiction and

factual matters under the contract which were within

the board’s jurisdiction.

The court pointed out that no matter what the

claim is labeled or what action the board may have

taken, the board had no jurisdiction of claims for

breach of contract even if it considered and passed

upon those claims.

In Urban Plumbing, the stipulated issue before

the Board of Contract Appeals was whether or not

a contract modification constituted an “accord and

satisfaction.”

The government claimed it did, and the contractor

cliamed that it did not. The contractor claimed that

it did not for several reasons: (1) No meeting of

82: =

minds; (2) no consideration; (8) lack of reality dt

assent (duress) etc.; the contractor also claimed that

the construction of the modification after its lan.

guage was changed was understood to permit a claim

for additional costs should such added costs materia}.

ize under the extension demanded by the government,”

Both the contract provisions and the Wunderlich

Act provided that the contracting officers’ decision,

that of a department head or other fact finder should

not be final on a question of law.

What constitutes an accord and satisfaction is a

legal question. The board’s opinion made no reference

to that legal question except to hold that there was no

duress because when the time set for performance of

the contract had expired (even though admittedly,

the fault of the government), the contractor was “in

default” and the contractor had a right to cancel the

contract, and when he threatened to cancel the con-

tract, he did what he had a legal right to do.

That finding is now (for the first time) admitted

to be in error (Pet. Br. 20, n. 17).

But says the petitioner even if in error, the court

must remand to the Board to redetermine that matter

after instructing the Board as to the proper law, and

the Court of Claims can not for itself determine

whether or not the action of the contracting officer

constituted duress.

Where the facts are not in dispute, the matter

always becomes a question of law (W. R. Grimshaw

Co. v. Nevil v. Withrow, supra.

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he undisputed facts are that the government de-

lay in appointing an approval engineer, and in rejec-

tion or approval of products submitted was the cause

of the need for a contract extension.

The contract modification itself so states.

The Court of Claims examined the evidence care-

fully. It stated that it believed that the board had so

found as a fact but that if it had not, it would so

find because there was no substantial evidence to the

contrary, and minds could not differ as to the evi-

dence (Pet. Br. App. 21).

How then can petitioner claim that the Court of

Claims ignored evidence when the opinion itself states

that the court carefully examined the evidence?

As repeatedly stated, the evidence was from peti-

tioner’s files and its own witnesses by which it is

bound; the contract modification says the reasons

upon which it was based.

It can only be concluded that the claim for cer-

tiorari comes from the conclusion of some government

counsel unfamiliar with the records of this case be-

cause the basic propositions are admitted both fact-

ually and legally or are based upon findings which

petitioner itself claims are conclusive.

Respondent has read the cases cited in page 22 of

petitioner’s brief. Many of those have been cited in

the briefs before the Court of Claims. It is apparent

that petitioner believes the Court of Claims in those

cases has reviewed and rejected administrative find-

ings.

84.

-- Respondent finds no basis for such a conclusion

from a reading of the decisions of those cases,

If petitioner knows of facts not apparent from

the various opinions on which the judgments were

based, respondent is not in a position to comment

thereon without access to the same information if any

exists.

A reading of the various opinions indicated to re.

spondent that in almost all if not all of the decisions,

the Court of Claims has been extremely careful tp

follow the Wunderlich Act, and the decisions of the

Supreme Court, in each case, explaining any varia.

tions which might be misleading: (

But whether that position is correct or incorrect,

the case of “Urban Plumbing” does not fall within

the factual matter of those cases (particularly 'Wood-

crest Construction Co. v. United States, 408 F.2d 406,

which petitioner seeks to associate with the pe-

tition for certiorari in this case). Nor does Urban

Plumbing fall within the prohibition of analogies of

the Utah Construction, Anthony Grace or Carlos Bi-

anchi decisions of this court.

The court here did not treat this cause as a breach

of contract case, but actually did exactly as petitioner

claims it should have done: It adopted a board find-

ing: (1) that there was admitted delay under the

‘Woodcrest was referred to a court of claims commis-

sioner for factual hearings and was decided by a divided

court. Urban was referred to a court of claims commissioner

who made no factual review and returned it to the court of

claims for determination of the legal matters. The Urban

case was decided by a unanimous court.

Aire THD HOLIinnN PHOR CORY

85

state of facts; (2) that there was a finding that the

delay was admitted by the fault of the government;

(3) that there was machinery under the “equitable

adjustment provisions under the contract to deter-

mine a just compensation; and (4) directed that the

hoard should proceed to make an equitable award to

the contractor under the contract.

For the reasons stated, the petition should be

denied.

WARDE H. ERWIN